The news agenda yesterday oscillated between Phil Hammond saying that the Tories had only identified £1.5 billion of cuts and Labour seizing on Cameron’s shift of emphasis saying that there would be no swingeing spending cuts, just a start on cuts in 2010. Mandelson claimed that the Tories would pull the rug out from under the recovery by cutting £11 billion this year when he himself said only last month that we need to cut £80 billion-a-year within 4 years. The government is even legislating to that effect. It is like the Mad Hatter’s Tea Party:

`Have some wine,’ the March Hare said in an encouraging tone. Alice looked all round the table, but there was nothing on it but tea. `I don’t see any wine,’ she remarked. `There isn’t any,’ said the March Hare. `Then it wasn’t very civil of you to offer it,’ said Alice angrily.

Meanwhile, back in fiscal reality, Britain is the most indebted nation in the industrialised world. McKinsey released research yesterday which puts the “billion here, a billion there” political squabbling in perspective.

Have the politicians grasped the magnitude of the deep hole Britain is in? The Tories have publicly identified spending cuts equivalent to less than ¼ of a percent of GDP. The government is overspending by some hundred times that amount. This is “through the looking glass” economics.

Alice laughed. “There’s no use trying,” she said: “one can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half-an-hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”